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Coronavirus: Labs can charge what they please for COVID-19 tests

Written by Diane Archer

Sarah Kliff reports for the New York Times that labs around the country are charging wildly varying prices for COVID-19 tests. Why not? They can legally charge whatever they please, and Congress has required health insurers to pay. How is this not the definition of an insane health care pricing system?

Unlike in any other wealthy country, the US health care system is designed to let health care providers charge corporate health insurers and the uninsured pretty much what they will. And, because corporate health insurers can profit more from high prices, they are not advocating for government price regulation. So, it’s not surprising–though it is shocking–that Gibson Diagnostic Labs in Irving, Texas is charging a bloody fortune for its COVID-19 tests, which are no different from tests that cost $100.

Because Congress does not regulate health care prices, Gibson Diagnostic Labs can legally charge health insurers $2,315 for individual coronavirus tests, even though its cash price for the test is $150. And, likely its cost for the test is far less than $150.

Kliff says that the laboratory is taking advantage of a federal law that requires insurers to pay the full cost of all COVID-19-related testing. But, the truth is that insurers pay insanely high rates even when Congress does not require them to.

Health care prices in the United States are easily twice as much as prices in other wealthy country. The average charge for an appendectomy here is $13,020. In England, it’s $3,050.  

Health care prices also vary wildly in the US. Kliff points to one study showing that the cost for a simple appendectomy in California ranged from $182,955 to $1,529.

Even if you have insurance, you should know that you are paying these insane prices in the form of high health insurance premiums and out-of-pocket costs. Insurers pass these costs along to their members. Most likely, 2021 health insurance premiums will reflect astronomical testing and treatment costs, though health care spending overall has dropped significantly because so few people have been getting elective services.

And, because doctors tend to provide a sea of services on top of the primary service their patients receive, many people receiving free COVID-19 testing are getting high medical bills  for unexpected services. Understandably, a Kaiser Family Foundation poll shows that Americans tend to be worried about the affordability of COVID-19 care.

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